AGREEMENT WOULD MERGE BOATMEN'S, NATIONSBANK

NationsBank Corp. and Boatmen's Bancshares Inc. have announced an agreement to merge into a company that would serve more than 13 million customers in 16 states.

NationsBank has agreed to pay about $9.5 billion in cash and stock for Boatmen's Inc. in the third-biggest U.S. banking merger on record.

Following the merger, NationsBank would have combined assets of approximately $230 billion, $20 billion in shareholders' equity and a market capitalization of $33 billion.

The merger is subject to approval of Boatmen's and NationsBank shareholders and regulatory authorities and is expected to close in January 1997.

The deal would expand NationsBank's strong position in the South to the Midwest, where Boatmen's is based at St. Louis.

"This is mostly new territory for NationsBank," said James Limbaugh, president of Boatmen's Bank of Cape Girardeau. "The only overlap in markets will be in Tennessee and Texas."

Boatmen's Bancshares, with assets of $41 billion, is among the 25 largest U.S. bank-holding companies, operating at more than 650 sites in nine states. Boatmen's has eight locations in Cape Girardeau County: five in Cape Girardeau, including the main bank at 2001 William; two in Jackson; and one in Fruitland.

"This is a real windfall for stockholders in Boatmen's," said Limbaugh. "And a lot of our employees are stockholders."

NationsBank's closing price of $92.37 on Thursday would give Boatmen's shareholders about $60.27 a share for their stock. That is a 40 percent premium over Boatmen's closing price of $42.93 a share Thursday on the Nasdaq exchange.

Boatmen's shareholders could choose cash or stock or a combination as long as at least 60 percent of the total payment is in stock.

"This transaction all comes down to timing," said Limbaugh. "The boards of both companies thought the time was right to create a mega-franchise. The key to making it work is to make sure it is transparent to customers."

The challenge, said Limbaugh, is to meet the changeover with as little disruption as possible. "Both banks bring huge advantages in terms of products to customers and general overall performances. NationsBanks has been a top performer in the industry for a number of years.

Limbaugh said it was too early to talk about employee changes. "But I have a fundamental belief that if people perform well and consistent there is always a place for them," he said.

Among U.S. bank mergers, the deal would trail only Wells Fargo & Co.'s $14.2 billion purchase of First Interstate Bancorp and the $13 billion combination in which Chemical Banking Corp. acquired Chase but kept the better-known Chase name. Both of those mergers were completed earlier this year.

Andrew B. Craig III, chairman and chief executive officer of Boatmen's, would be chairman of the board of NationsBank Corp., and Hugh L. McColl Jr., current chairman and chief executive officer of NationsBank Corp., would be chief executive officer of the merged company.

"The combination of these two great companies creates a new power in banking in North America," said McColl. "We are creating tomorrow's banking company today."

NationsBank, the nation's fifth-largest banking company, is based in Charlotte, N.C. It has branches in nine states, mainly in the South and Washington, D.C. It had assets June 30 of $192 billion.

After the deal, NationsBank would trail only No. 1 Chase Manhattan Corp., second-ranked Citicorp and No. 3 BankAmerica Corp. It would move ahead of J.P. Morgan & Co., currently the fourth-largest banking company by assets.

NationsBank said it expects to save $335 million annually as a result of the deal, a combined expense savings of 5 percent.

The company said analysts estimate it would have earnings power to produce nearly $3 billion in net income during 1997.

Friday's proposed merger of Boatmen's into NationsBank means the end of an era for the region's largest bank. Although a name change has not been announced, it is assumed that Boatmen's will become NationsBank, said Limbaugh.

In recent years, Boatmen's has become what the industry terms a super-regional by gobbling up a number of smaller banks. It now is the biggest bank in Missouri, Kansas, Arkansas, Oklahoma and New Mexico.